PACCAR Inc. PCAR is slated to release first-quarter 2020 results on Apr 21, before the opening bell. The Zacks Consensus Estimate for the quarter to be reported is earnings of $1.30 per share on revenues of $5.04 billion.
The trucking giant came up with better-than-expected results in the last reported quarter on the back of higher-than-anticipated revenues from Truck and Parts segments. As far as earnings surprises are concerned, PACCAR managed to surpass estimates in three of the trailing four quarters, with the average positive surprise being 4.4%.
PACCAR Inc. Price and EPS Surprise
PACCAR Inc. price-eps-surprise | PACCAR Inc. Quote
Trend in Estimate Revision
The Zacks Consensus Estimate for first-quarter 2020 earnings per share has declined 2 cents over the past 30 days. The estimated figure indicates a 28.2% drop from the year-ago reported earnings. The Zacks Consensus Estimate for revenues also suggests a decline from the prior-year reported figure of $6.1 billion.
Factors to Note
The coronavirus outbreak is likely to have dealt a severe blow to the company’s earnings and revenues. Even without factoring in the effects of coronavirus, the firm expects first-quarter deliveries and gross margins to decline sequentially. During fourth-quarter 2019 earnings call, PACCAR anticipated first-quarter deliveries to decline 5-7% sequentially amid lower build rates in North America. Further, gross margins were forecast to fall to 14% from 14.4% in the fourth quarter.
With COVID-19 pandemic rattling the auto industry, PACCAR is expected to have borne the brunt of decline in customer demand and a bleak world economic outlook. Lower orders for Class 8 trucks are anticipated to have dented revenues in the first quarter of 2020. The Zacks Consensus Estimate for revenues from the Trucks unit is pegged at $4,285 million, indicating a decline from $5,107.3 million in the year-ago quarter.
The proven Zacks model does not conclusively predict an earnings beat for PACCAR this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +1.18%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: PACCAR currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some companies, which according to our model have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Anthem, Inc. ANTM has an Earnings ESP of +1.28% and a Zacks Rank #3. The company is slated to release first-quarter 2020 earnings on Apr 29.
Aflac Incorporated AFL is set to report first-quarter 2020 earnings on Apr 29. The company has an Earnings ESP of +1.31% and a Zacks Rank #3.
Cigna Corporation CI is scheduled to unveil first-quarter 2020 earnings on Apr 30. The firm has an Earnings ESP of +1.53% and a Zacks Rank #3.
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